Amid mounting premiums, the number of people forced to resort to seeking car insurance through a “declined cases agreement” has more than trebled in the course of three years, according to figures from the Department of Finance.
All motor insurers are signed up to the declined cases agreement operated by Insurance Ireland and administered by a committee made up of representatives of each of the companies and of the Consumer Association of Ireland and Financial Services Ombudsman’s Bureau, who act as external observers.
Under the scheme, the insurance market cannot refuse to provide cover to an individual if he or she has approached at least three insurers and has not been able to obtain a quote from them.
In general, the insurer first approached will be required to provide the individual with a quote.
Furthermore, where an individual has held a policy within the previous three years, the insurance company concerned is obliged to provide the individual with a quotation. Again this is subject to the proviso that refusals have been received from three insurers.
The only grounds on which an insurer can refuse cover are if providing insurance would be contrary to the public interest.
The committee can also decide whether a quote is so high or the terms so excessive as to make the quote tantamount to a refusal, in which case it will review the matter.
In 2012, there were 178 cases dealt with under the agreement. That number rose to 669 by 2014 and, according to the Department of Finance, while the figure is not yet available for 2015, it appears to be “marginally” higher than 2014.
Meanwhile, Finance Minister Michael Noonan has confirmed that, while he does not intend to reconstitute the Motor Insurance Advisory Board “at this time”, he has asked his officials to examine the factors which contribute to increasing costs of insurance.
“This work is part of an overall review of policy in the insurance sector which my department is carrying out in consultation with the Central Bank and other departments, agencies, and external stakeholders,” said Mr Noonan.
“The objective of the review is to recommend measures to improve the functioning and regulation of the insurance sector.”
He said the review will continue over the coming months with a view to being completed by the end of the year.
Mr Noonan said there should be a stable insurance sector “and that risks to the policyholders and to the wider financial system are limited”.
He acknowledged that the ability of the Government to influence insurance pricing is limited, as insurance companies are required under European law to price in accordance with risk.
However, he added: “While the provision and the pricing of insurance policies is a commercial matter for insurance companies, this does not preclude the Government from introducing measures that may, in the longer term, lead to a better claims environment that could facilitate a reduction in claims costs.”
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